Presentation by Julian Mansfield, Policy Lead for Energy Security in European & Multilateral Fora, British Foreign & Commonwealth Office, delivered at a briefing and energy policy discussion forum held at the British Embassy in Oslo on 28 March 2011.

1. Energy security and British
diplomacy
28 March 2011
Julian Mansfield, Policy Lead for Energy Security in
European and Multilateral Fora

2. Content
• Energy security context
– What is energy security?
– What are the energy risks?
• British energy diplomacy
– International energy strategy:
• Price stability
• Investment in production
• Reliable supply
• Low carbon
• The importance of Norway
– Energy supplier
– Low carbon partner

3. Energy security

4. What is energy security?
Economic
security
• Affordable
• Not volatile
Energy
Security
Physical
security
• Reliable
• Accessible

5. But there are risks to energy security
Investment
Developed
challenges linked
economy
to supply
demand
constraints
Emerging
Geopolitical risks
economy
affecting supply
demand > Price rises
and volatility
> Supply
interruptions

6. Demand-side risks:
Emerging / developed economy demand
5 000
World primary energy (Mtoe)
Oil
Global primary energy
4 000 Coal
Gas demand grows by 36%
3 000 between 2008 & 2035,
with natural gas rising
2 000 Biomass the most
Nuclear
1 000
Other renewables
Hydro
0
1980 1990 2000 2010 2020 2030
IEA WEO: New Policies Scenario
8 9
12
9 11
15
36 4
11
As OECD & Asia import 8 3.5
20
7
more, MENA, Russia and 1.5
West Africa must supply
more
Net Imports now & in 2030 (Million barrels per day)‫‏‬
Net Exports now & in 2030 (Million barrels per day)‫ ‏‬IEA WEO

7. Supply-side risks:
production constraints
• Production capacity is limited:
– increasingly complex geology
and technology (e.g. Arctic)
– ultimately finite resources
– political conditions (e.g. MENA)
• Underinvestment after 2020
– Private capital
• Regulatory and tax uncertainties (e.g. Russia)
• Technology uncertainties
– Resource nationalism (e.g. Kazakhstan)

8. Supply-side risks:
geopolitical risks to export and production

9. Supply-side risks:
gas supply and security

10. But what are we doing
about it?

11. International Energy Strategy
• FCO/DECC/Cabinet Office jointly
developed an International Energy Encouraging
production
Strategy to address these risks. investment
• It is based around 4 pillars:
Reducing British Enhancing
demand
through low energy supply
diplomacy reliability
carbon
Enhancing
price stability

12. Enhancing price stability
Promote transparency in oil and gas markets
(JODI)
Enhance producer-consumer dialogue (IEF)
Shared analysis (IEF, IEA, OPEC)
Emergency arrangements (IEA, OPEC)

13. Encouraging investment in production
Demand
transparency
Investment friendly
regulation in key Multilateral legal
producer states protection

14. Enhancing reliability of supply
More efficient EU Diversity and Facilitating a North
and global gas reliability of gas Sea offshore grid
markets supplies
Improving the Limiting climate
physical security of threats
key infrastructure

15. Encouraging low carbon growth
Our objectives Our diplomacy
Encourage low carbon technology Building
Gathering and
confidence in
sharing
collective
analysis
action
Eliminate fossil fuel subsidies
Promote energy efficiency Influencing Shaping and
key framing the
constituencies global debate
Global legal framework / EU 30%

16. The importance of Norway

17. Norway‫‏‬and‫‏‬Britain’s‫‏‬energy‫‏‬security
• Norway supplies nearly 30% of UK energy,
including 58% of our gas imports and
74% of our oil imports.
• Gas has a vital role to play in the UK
energy mix during the transition to
low carbon and beyond.
• January’s‫‏‬Joint Prime
Ministerial Statement
of Cooperation reflects
the importance we place
on Norway

18. Norway: our key partner
• PMs joint Statement of Cooperation (January 2011):
– Energy supply: Safe oil and gas exploration, extraction and supply,
offshore wind, CCS, development of a North Sea power grid, and a
Norway-UK electricity interconnector.
– Low carbon: Promote climate policies and technologies and work towards
a successful COP17 in Durban
• Officials dialogue will take forward this political vision
• “One North Sea Joint Ministerial Statement”‫(‏‬August‫ )0102‏‬agreed
on cooperation priorities on energy and climate change

19. Conclusion